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Dai Powell's blog

Dai Powell is HCT Group's Chief executive. His blog explores ideas on social enterprise, transport and related issues. Always forthright, Dai’s views are his own and do not necessarily reflect the position of HCT Group.


When the reality of mutualisation means privatisation

Posted: 02 Aug 2011

There are many in the social enterprise arena that eye the potential reorganisation of the NHS and local government as an opportunity, viewing the formation of mutuals to deliver public services as a positive step. Others counter that mutualisation is but privatisation by the back door, a smokescreen, misdirection.

It is plain to me that, as a sector, we have danced around this issue for too long. Some may have no problem with privatisation; others may decry it out of hand. If you hold to either stance, we still need to be clear about what privatisation is.

This is simple. Assets held by the state for common benefit are a form of common ownership. Assets held in perpetuity by an organisation for common benefit (an "asset lock") are another form of common ownership. Assets held privately by any type of organisation – including a new mutual – without an asset lock is private ownership.

This is the heart of the matter: mutualisation of a public service – without an asset lock for community benefit – is privatisation.

If this seems an abstract point and distant from your day-to-day concerns, then be mindful that we have been here before – in my industry, public transport. When the bus industry was privatised by Margaret Thatcher in 1985, a significant majority of the companies that spun out were management and/or worker buy-outs. Many of these companies were owned by the staff that worked there – they were mutuals.

These had no asset lock; it was swift and easy for them to sell out to larger private companies. This was exactly what most did; selling what was previously in the public realm to the private sector. It was privatisation plain and simple – and the explicit aim of the government of the day.

The legacy of this, outside London, is a market where five multinationals farm their regional monopolies at the expense of passenger and taxpayer alike, with choice and competition largely absent.

Is this where we are going with health and other public services? We should not sleepwalk into spin-outs unless we know exactly what we're really doing. So let's cut the bullshit and be clear: if it isn't asset locked, it is privatisation; if it is asset locked, it stays in the community for ever.

This post first appeared on the Guardian Social Enterprise Network blog on Monday 27 June 2011


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